[Federal Register Volume 74, Number 169 (Wednesday, September 2, 2009)]
[Rules and Regulations]
[Pages 45325-45327]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21072]


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POSTAL SERVICE

39 CFR Part 111


First-Class Mail Incentive Program

AGENCY: Postal ServiceTM.

ACTION: Final rule.

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SUMMARY: The Postal Service is revising Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM[supreg]), to add 
section 709.3 which introduces new standards for a special volume 
incentive program for mailers of commercial (automation and/or Presort) 
First-Class Mail[supreg] cards, letters and/or flats with mail volume 
exceeding their individual USPS[supreg]-determined threshold levels. 
The program period will be from October 1, 2009 through December 31, 
2009.

DATES: Effective Date: October 1, 2009.

FOR FURTHER INFORMATION CONTACT: Nii-Kwashie Aryeetey at 202-268-7442 
or Kevin Gunther at 202-268-7208.

SUPPLEMENTARY INFORMATION: The Postal Service is implementing a volume 
incentive program for qualified mailers of commercial (automation and/
or Presort) First-Class Mail cards, letters and/or flats, for volume 
mailed during the program period, above their USPS-determined threshold 
level.
    To participate, mailers must be the permit holder (i.e., owner) of 
a permit imprint advance deposit account(s) or the owner of qualifying 
mail volume entered through the permit imprint advance deposit account 
of a mail service provider. Qualifying mail owners must be able to 
demonstrate volume of at least five-hundred thousand (500,000) 
commercial First-Class Mail cards, letters and/or flats pieces within 
the period of October 1, 2007 to December 31, 2007 and five-hundred 
thousand (500,000) commercial First-Class Mail cards, letters and/or 
flats pieces within the period of October 1, 2008 to December 31, 2008, 
for a permit imprint advance deposit account(s), precanceled stamp 
permit(s), postage meter permit(s), or by a combination of these 
methods. Applicants may also qualify for the program with volume mailed 
through an account(s) owned by a mail service provider, when adequate 
documentation is provided that specifies the applicant is the owner of 
the mail. Those mail owners eligible to participate in the program will 
be notified of their eligibility, in writing, on or before October 15, 
2009. Mail owners wishing to participate in the program, who believe 
they meet the eligibility standards under DMM 709.3.2 and were not 
notified by letter, may request a review of their eligibility by 
contacting the USPS at [email protected].
    As part of the application process, participating mail owners will 
be required to provide historical data demonstrating their commercial 
First-Class Mail cards, letters and/or flats volumes mailed within the 
periods of October 1, 2007 through December 31, 2007, October 1, 2008 
through December 31, 2008, September 2008, and January 2009.
    Participating mail owners demonstrating commercial First-Class Mail 
cards, letters or flats volume above their established threshold level 
will receive a credit following the close of the program period. 
Thresholds will be calculated independently for each applicant, by 
comparing the volume of commercial First-Class Mail cards, letters and/
or flats mailed within the period from October 1, 2007 through December 
31, 2007 to the volume mailed within the period of October 1, 2008 
through December 31, 2008. The change in recorded volume between these 
two periods will represent the applicant's volume trend. Trends that 
show growth for the period of October 1, 2008 to December 31, 2008, 
versus that shown in the same period of the prior year, will appear as 
a ratio above 1.0 (expressed here in a decimal format). Trends that 
show a volume decline for the period of October 1, 2008 to December 31, 
2008 will appear as a ratio below 1.0. The applicable ratio will then 
be applied to the volume of commercial First-Class Mail cards, letters 
and flats mailed within the period of October 1, 2008 to December 31, 
2008. This result represents the USPS-determined threshold level for an 
individual applicant.
    Mail owners (applicants) are eligible to participate in the program 
with qualifying volume prepared by a mail service provider when entered 
through a permit owned by the applicant. Mail volume through a mail 
service provider's permit, may also qualify for the program, but only 
if adequate documentation identifies the mail as being prepared on 
behalf of the applicant and demonstrates the applicant's prior mailing 
activity. Mail service providers are not eligible to participate in the 
First-Class Mail Incentive program.
    Approved program participants, demonstrating an increase in their 
total commercial First-Class Mail cards, letters and/or flats volume 
above their approved threshold level will qualify for a credit to a 
designated permit imprint advance account, Centralized Account Payment 
System (CAPS) account or paid through another approved method. The 
total postage attributable to commercial First-Class Mail cards, 
letters and flats within the program period will be identified for each 
participant and divided by the total number of recorded pieces, to 
generate the average price per piece. Participants receive a credit in 
the amount of 20 percent of the average price per piece for the total 
number of mailpieces of the incremental volume above their approved 
threshold level as recorded during the program period.
    The First-Class Mail Incentive program encourages mailers to 
generate new mail volume. As a deterrent to mailers shifting previously 
planned volume into the program to obtain incentive credits, the 
mailing activity of participating mail owners will be monitored in the 
calendar months prior to and following the end of the program as 
follows:
     The participant's previously determined volume trend will 
be applied to their volume of commercial First-Class Mail cards, 
letters and flats mailed within the month of September 2008 and January 
2009, to determine the participant's September 2009 and January 2010 
expected volume.
     Each participant's actual September 2009 and January 2010 
volume will then be compared to their respective September 2009 and 
January 2010 expected volume.

[[Page 45326]]

     Participants failing to meet (or exceed) either of their 
expected volume thresholds will have any demonstrated shortfall in 
volume deducted from the number of mailpieces eligible for an incentive 
credit within the program.
     Participants demonstrating a shortfall in volume to either 
their September 2009 or January 2010 expected volumes will have that 
shortfall deducted from the number of mailpieces eligible for an 
incentive credit within the program regardless of any surplus 
demonstrated in the expected volume threshold of the other month.
    Additionally, as part of the program administration, the Postal 
Service will require each program participant to certify the data used 
to calculate the volume trends, threshold levels and their September 
2009 and January 2010 expected volumes. This certification requirement 
will be similar to what is currently used on PS Form 3600, Postage 
Statement--First-Class Mail and Priority Mail. The certification 
requirement for this initiative is aimed at ensuring that the data used 
by the Postal Service to calculate the applicable volume trend, 
threshold level and September 2009 and January 2010 expected volume for 
each qualifying mailer is accurate.
    In accordance with the Postal Accountability and Enhancement Act, 
on August 11, 2009, the Postal Service filed a Notice with the Postal 
Regulatory Commission (PRC) regarding the First-Class Mail Incentive 
program. Regulatory review will take 45 days from that date.
    The Postal Service adopts the following changes to Mailing 
Standards of the United States Postal Service, Domestic Mail Manual 
(DMM), incorporated by reference in the Code of Federal Regulations. 
See 39 CFR 111.1.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

0
Accordingly, 39 CFR part 111 is amended as follows:

PART 111--[AMENDED]

0
1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority:  5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 414, 
416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633 
and 5001.

0
2. Revise the following sections of Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM) as follows:

Mailing Standards of the United States Postal Service, Domestic Mail 
Manual (DMM)

* * * * *

700 Special Standards

* * * * *

709 Experimental and Temporary Classifications

* * * * *
[Add a new section 709.3.0 to introduce new standards for a volume 
incentive program for commercial First-Class Mail cards, letters and 
flats as follows:]

3.0 First-Class Mail Incentive Program

3.1 Program Description

    The First-Class Mail Incentive program provides volume pricing for 
qualified mail owners of commercial (automation and/or Presort) First-
Class Mail cards, letters and/or flats who are able to document mail 
volume exceeding their individual USPS-determined threshold level 
during the October 1, 2009 through December 31, 2009 program period. 
Participating mail owners documenting volumes above their established 
threshold level will receive a 20% credit, for each piece exceeding 
their individual USPS-determined threshold level, to a designated 
permit imprint advance deposit account, Centralized Account Payment 
System (CAPS) account, or provided through another approved method at 
the conclusion of the program period. Program participants must review 
and certify the accuracy of the data used by the USPS to calculate 
their individual volume trend, threshold level and their September 2009 
and January 2010 expected volumes.

3.2 Eligibility Standards

    Mail owners are considered eligible for the program as follows:
    a. Applicants must be able to document, in aggregate, volume of at 
least five-hundred thousand (500,000) pieces of commercial First-Class 
Mail cards, letters and/or flats for each of the October 1, 2007 to 
December 31, 2007 and October 1, 2008 to December 31, 2008 time periods 
as follows:
    1. Volume through one or more permit imprint advance deposit 
accounts, precanceled stamp permits, or postage meter permits owned by 
the applicant, or
    2. Volume prepared by a mail service provider when entered through 
a permit owned by the applicant, or
    3. Volume within a mail service provider's permit, which can be 
identified as being prepared on behalf of the applicant.
    b. Mail service providers are not eligible to participate in this 
program.

3.3 Program Threshold Level

    Threshold level figures will be calculated independently for each 
applicant as follows:
    a. Total documented volume of commercial First-Class Mail cards, 
letters and/or flats recorded within the period from October 1, 2007 to 
December 31, 2007 will be compared to that recorded within the period 
of October 1, 2008 to December 31, 2008.
    b. The change in recorded mailing volume between these two periods 
will represent the applicant's volume trend. Trends that show growth 
for the period of October 1, 2008 to December 31, 2008, versus that 
shown in the same period of the prior year, will appear as a ratio 
above 1.0 (expressed here in a decimal format). A volume decline from 
October 1, 2008 to December 31, 2008 will appear as a ratio below 1.0.
    c. The applicable ratio will then be applied to the volume of 
commercial First-Class Mail cards, letters and flats, for all of the 
applicant's mailings, or other qualifying volume recorded through the 
permit of a mail service provider (MSP), mailed during the period from 
October 1, 2008 through December 31, 2008.
    d. The product of the calculation in 3.2c will represent the USPS-
determined threshold level for the selected applicant.

3.4 Application

    Mail owners meeting the eligibility criteria will be notified of 
their eligibility for the program and advised of the application 
process and requirements. Mail owners interested in participating may 
apply at www.usps.com/firstclassmailincentive. Eligible applicants must 
apply for the program no later than November 1, 2009. Mailers meeting 
the eligibility standards under 709.3.2, and not notified by letter, 
may request a review of their eligibility by contacting the USPS via 
email at [email protected]. Mail owners requesting 
review of their program eligibility must submit their request to the 
USPS no later than November 1, 2009. Following registration, mailers 
will be required to provide historical data demonstrating their 
commercial First-Class Mail cards, letters and/or flats volumes mailed 
within each of the periods of October 1, 2007 to December 31, 2007, 
October 1, 2008 to December 31, 2008, September 2008 and January 2009. 
The USPS will review the data provided and applicants will be notified 
of their approval for

[[Page 45327]]

participation in the program, their approved threshold level, and their 
revised threshold level (when applicable). Mailers wishing to dispute 
their threshold level will be provided with instructions on the 
process.

3.5 Program Participation

    Mail owners may participate in the program with qualifying volume 
as follows:
    a. Commercial First-Class Mail cards, letters and/or flats volume 
mailed by the participant through the participant's own permit imprint 
advance account, precanceled stamp permit(s), or postage meter 
permit(s);
    b. Commercial First-Class Mail cards, letters and/or flats volume 
prepared by a mail service provider, when entered through a permit 
owned by the participant;
    c. Commercial First-Class Mail cards, letters and/or flats pieces 
mailed through a mail service provider's permit, only when the pieces 
can be identified as being prepared for the participant and when the 
applicant's prior mailing activity through the mail service provider's 
permit can be validated.

3.6 Incentive Program Credits

    Approved participants demonstrating an increase in commercial 
First-Class Mail cards, letters and flats volume above their approved 
threshold level qualify for a credit to their designated permit imprint 
advance deposit account, Centralized Account Payment System (CAPS) 
account, or provided through another approved method as follows:
    a. The total postage paid for commercial First-Class Mail cards, 
letters and flats recorded during the program will be identified for 
each participant.
    b. The total postage paid during the program period will be divided 
by the total number of recorded pieces to generate the average price 
per piece for the program period.
    c. Participants will receive a credit in the amount of 20 percent 
of the average price per piece applied to the total number of 
mailpieces, for the incremental volume above their approved threshold 
level, recorded during the program period.

3.7 Mailing Activity Review

    Mailing activity by participants will be reviewed in the calendar 
months preceding and following the end of the program. The qualifying 
volume recorded for participants may be adjusted in accordance with the 
following:
    a. The participant's previously determined volume trend will be 
applied to the volume of commercial First-Class Mail cards, letters and 
flats mailed by the participant within the months of September 2008 and 
January 2009, to determine the program participant's September 2009 and 
January 2010 expected volumes.
    b. The participant's actual September 2009 and January 2010 volumes 
will then be compared to their September 2009 and January 2010 expected 
volumes.
    c. Participants failing to meet their September 2009 and/or January 
2010 expected volume will have any shortfall in volume deducted from 
the number of mailpieces eligible for an incentive credit within the 
program.
    d. Participants demonstrating a shortfall in volume to either their 
September 2009 or January 2010 expected volumes will have that 
shortfall deducted from the number of mailpieces eligible for an 
incentive credit within the program regardless of any surplus 
demonstrated in the expected volume threshold of the other month.
* * * * *

Neva R. Watson,
Attorney, Legislative.
[FR Doc. E9-21072 Filed 9-1-09; 8:45 am]
BILLING CODE 7710-12-P